SUPPLEMENT TO THE FIDELITY FREEDOM FUNDS(registered trademark)' MAY
20, 1999 PROSPECTUS
The following information replaces similar information found under the
heading "Description of Underlying Fidelity Funds" in the "Investment
Details"section beginning on page 25.
FIDELITY INTERMEDIATE BOND FUND seeks a high level of current income.
FMR normally invests the fund's assets in U.S. dollar-denominated
investment-grade bonds (those of medium and high quality).
FMR uses the Lehman Brothers Intermediate Government/Corporate Bond
Index as a guide in structuring the fund and selecting its
investments. FMR manages the fund to have similar overall interest
rate risk to the index. In addition, the fund normally maintains a
dollar-weighted average maturity between three and 10 years. As of
April 30, 1999, the dollar-weighted average maturity of the fund and
the index was approximately 5.5 and 4.4 years, respectively. In
determining a security's maturity for purposes of calculating the
fund's average maturity, an estimate of the average time for its
principal to be paid may be used. This can be substantially shorter
than its stated maturity.
FMR allocates the fund's assets among different market sectors (for
example, corporate or government securities) and different maturities
based on its view of the relative value of each sector or maturity.
In buying and selling securities for the fund, FMR analyzes a
security's structural features, current price compared to its
estimated long-term value, and any short-term trading opportunities
resulting from market inefficiencies, and the credit quality of its
issuer.
In order to earn additional income for the fund, FMR may use a trading
strategy that involves selling mortgage securities and simultaneously
agreeing to purchase similar securities on a later date at a set
price. This trading strategy may result in an increased portfolio
turnover rate which increases transaction costs and may increase
taxable gains.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices, interest rates or other factors that affect security
values. If FMR's strategies do not work as intended, the fund may not
achieve its objective.
FIDELITY INVESTMENT GRADE BOND FUND seeks a high level of current
income.
FMR normally invests the fund's assets in U.S. dollar-denominated
investment-grade bonds (those of medium and high quality).
FMR uses the Lehman Brothers Aggregate Bond Index as a guide in
structuring the fund and selecting its investments. FMR manages the
fund to have similar overall interest rate risk to the index. As of
April 30, 1999, the dollar-weighted average maturity of the fund and
the index was approximately 8.8 and 9.0 years, respectively. In
determining a security's maturity for purposes of calculating the
fund's average maturity, an estimate of the average time for its
principal to be paid may be used. This can be substantially shorter
than its stated maturity.
FMR allocates the fund's assets among different market sectors (for
example, corporate or government securities) and different maturities
based on its view of the relative value of each sector or maturity.
In buying and selling securities for the fund, FMR analyzes a
security's structural features, current price compared to its
estimated long-term value, and any short-term trading opportunities
resulting from market inefficiencies, and the credit quality of its
issuer.
In order to earn additional income for the fund, FMR may use a trading
strategy that involves selling mortgage securities and simultaneously
agreeing to purchase similar securities on a later date at a set
price. This trading strategy may result in an increased portfolio
turnover rate which increases transaction costs and may increase
taxable gains.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices, interest rates or other factors that affect security
values. If FMR's strategies do not work as intended, the fund may not
achieve its objective.
FIDELITY CAPITAL & INCOME FUND seeks to provide a combination of
income and capital growth.
FMR invests the fund's assets in equity and debt securities. FMR has
the flexibility to invest the fund's assets in securities of any type
or quality, including defaulted securities, but expects to invest the
majority of the fund's assets in debt securities and convertible
securities, with an emphasis on lower-quality debt securities. Many
lower-quality debt securities are subject to legal or contractual
restrictions limiting FMR's ability to resell the securities to the
general public. FMR may invest in companies whose financial condition
is troubled or uncertain and that may be involved in bankruptcy
proceedings, reorganizations or financial restructurings.
FMR may invest the fund's assets in securities of foreign issuers in
addition to securities of domestic issuers.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions. Factors considered include a
security's structural features and current price compared to its
long-term value, and the earnings potential, credit standing and
management of the security's issuer.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices, interest rates or other factors that affect security
values. If FMR's strategies do not work as intended, the fund may not
achieve its objective.
